French oil giant Total has agreed to sell all of its interests in the FUKA and SIRGE gas pipelines and the St. Fergus Gas Terminal to North Sea Midstream Partners for £585 million.
The Frigg UK Pipeline (FUKA) is a 362-kilometer, 32” gas pipeline that was originally constructed in 1977 to connect the Frigg Field on the UK – Norway median line to the St. Fergus Gas Terminal in Scotland.
The Frigg Field is now decommissioned but the FUKA pipeline is still operational, delivering gas from some 20 fields in the Northern North Sea to the terminal at St Fergus, Aberdeenshire. Total holds a 100% operated interest in the FUKA pipeline.
The St. Fergus Gas Terminal is a three-train processing plant with a capacity of 2,648 million cubic feet of gas per day (Mmscf/d), currently serving over 20 fields. Total holds a 100% operated interest in the terminal.
The Shetland Island Regional Gas Export System (SIRGE) is a 234-kilometer, 30” gas pipeline with a capacity of 665 Mmscf/d connecting the Shetland Gas Plant to the FUKA pipeline.
Total holds a 67% operated interest in the SIRGE pipeline alongside Dong E&P (UK) Limited (18.3%), Chevron North Sea Limited (7.2%) and OMV (UK) Limited (7.5%).
Patrick de La Chevardière, Chief Financial Officer at Total said: “The sale of these midstream transportation assets is another example of Total’s strategy of active portfolio management and the strong potential to unlock value from a range of infrastructure assets.
“Transferring ownership to an entity specialising in midstream UK assets creates value for us and ensures a long and bright future for the facilities.”
With the coming start-up of the Laggan-Tormore project in the West of Shetland area, Total is opening up its third hub in the UK and a new frontier gas production area for the industry.
By the end of 2015, Total is expected to become the largest producing N. Sea oil and gas company in the UK.
Following the completion of the sale, North Sea Midstream Partners will have an agreement with px Group for the operation and maintenance of the assets.
North Sea Midstream Partners was formed in 2012 by affiliates of ArcLight Capital Partners, Mike Wagstaff former chief executive of Venture Production plc) and the senior management of Teesside Gas Processing Plant Limited to invest in the midstream sector of the North Sea’s oil and gas industry.
Such assets include offshore pipelines, onshore gas or oil processing plants and associated storage facilities many of which are currently owned and operated by upstream field owners.